Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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I'm thinking that the next move will be horizontal, based on the slope of C and the following move, D.

It'll be interesting to see if this plays out that way.

$ $ $

I released a new version of Patternz (5.20). I added support for OHLC charts, as requested, and fixed a minor bug.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.

Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) - L

First support level: S1 = (2 * P) - H)

Second resistance level: R2 = P + (R1 - S1)

Second support level: S2 = P - (R1 - S1)

H = high price , L=low price, C=closing price

Consecutive Price Trends

Index

ConsecutiveCloses So Far

%

Comments

Dow industrials (^DJI)

3 weeks up

22.3%

Expect a reversal soon.

4 months up

21.9%

Expect a reversal soon.

S & P 500 (^GSPC)

5 weeks up

11.3%

Expect a reversal soon.

4 months up

28.8%

The trend may continue.

Nasdaq composite (^IXIC)

5 weeks up

9.4%

Expect a reversal soon.

4 months up

18.9%

Expect a reversal soon.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indices, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Found

Chart Pattern Name

17

Triangle, symmetrical

14

Channel

11

Pipe bottom

7

Rising wedge

7

Rectangle top

7

Triple bottom

6

Triple top

6

Triangle, ascending

5

Head-and-shoulders top

5

Dead-cat bounce

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example).
However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

Friday 2/24/17. Pattern Trading Setups for the Weekend.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 18 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 621 stocks searched, or 2.9%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

Excluding ETFs, there were 5 bullish chart patterns this week and 5 bearish ones with any remaining (5) being undecided.
The ratio of bullish to bearish patterns suggests the market is hinting of a coming bearish (down) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

Thursday 2/23/17. Intraday Market Direction: Nasdaq

The index dropped by -0.1% or -5.32 points. Since 02/05/1971 the index made 560 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.7% on 308 occasions.

Average loss was -0.8% on 252 occasions.

Expect the index to close higher 55.0% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 121/212 or 57.1% of the time.

The prediction of the index closing lower has been right 41/80 or 51.2% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

The index has followed an upward trend as the thin red line shows.

A rectangle top appears, which I show outlined in green. The index could continue to move sideways.

However, I was watching my program create the chart pattern indicator. It showed a red vertical bar (bearish). It disappeared but the indicator has taken a steep dip today. That could change
easily enough if we have a strong rise posted by the market. But it signals a warning that weakness is underlying this sideways move.

The above probabilities suggests a higher close on Thursday.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Wednesday 2/22/17. A Look At Indicators

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

This picture of the indicator is similar to the one last week.

The market continues to rise and the indicator climbs, too. I don't see any hint of things changing.

I guess that the only concern I have is that the Dow is rising too fast. The slope is too steep and that suggests a retrace is coming. And yes, I know all about the aspect ratio.
If you move the vertical right axis, you'll change the slope of the lines. Regardless, the slope is too steep to be sustainable over the long term.

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...

On Friday, 16% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 16%.

The fewest was 14% on 01/25/2017.

And the most was 59% on 02/23/2016.

Shown as a blue line on the above chart...

The 518 stocks in my database are down an average of 11% from their yearly high.

A week ago, the average was 11%.

The peak was 10% on 12/09/2016.

And the bottom was 28% on 02/23/2016.

Again, the lines did not show any net movement from a week ago. It's in a holding pattern.

Friday 2/17/17. Pattern Trading Setups for the Weekend.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 17 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 621 stocks searched, or 2.7%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 5 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 9 bullish chart patterns this week and 7 bearish ones with any remaining (5) being undecided.
The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

Thursday 2/16/17. Intraday Market Direction: Nasdaq

The index climbed by 0.6% or 36.87 points. Since 02/05/1971 the index made 472 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.7% on 293 occasions.

Average loss was -0.8% on 179 occasions.

Expect the index to close higher 62.1% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 121/211 or 57.3% of the time.

The prediction of the index closing lower has been right 41/80 or 51.2% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

The index is climbing at a good angle. It's not too steep nor too shallow.

Of course, as soon as you bet that it WILL continue, the trend will end and send you for a loss.

As the chart shows, the index has been moving up at a good clip for a week now. Let's hope it continues, but don't be surprised if the channel breaks out downward. As I mentioned
in a prior post, we're due for a downtrend to begin.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Wednesday 2/15/17. A Look At Indicators

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

Nothing has changed on this chart over the last week. Maybe that's good news. The forecast has the Dow peaking soon, so keep that in mind.

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...

On Monday, 16% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 17%.

The fewest was 14% on 01/25/2017.

And the most was 64% on 02/16/2016.

Shown as a blue line on the above chart...

The 518 stocks in my database are down an average of 10% from their yearly high.

A week ago, the average was 12%.

The peak was 10% on 12/09/2016.

And the bottom was 29% on 02/16/2016.

The above numbers show marked improvement over the prior week, not so much with the red line (a 1% point improvement) but with the blue line. A week ago, 12% of my stocks were at least
10% from their yearly highs. Now it's just 10%.

On both lines, however, it appears that this is more of a sideways move than the start of a new uptrend, I think.

-- Thomas Bulkowski

Tuesday 2/14/17. Intraday Market Direction: Dow

The index climbed by 0.7% or 142.79 points. Since 10/01/1928 the index made 648 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.6% on 357 occasions.

Average loss was -0.7% on 291 occasions.

Expect the index to close higher 55.1% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 132/220 or 60.0% of the time.

The prediction of the index closing lower has been right 32/64 or 50.0% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

The index has been climbing in a channel. I show that with the twin red lines.

I know. This sounds like a broken record. All I can say is that the index will break out of the channel sooner or later. My guess is sooner. Probably downward, too.

$ $ $

I released version 5.19 of Patternz. This has two small enhancements and one bug fix.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.

Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) - L

First support level: S1 = (2 * P) - H)

Second resistance level: R2 = P + (R1 - S1)

Second support level: S2 = P - (R1 - S1)

H = high price , L=low price, C=closing price

Consecutive Price Trends

Index

ConsecutiveCloses So Far

%

Comments

Dow industrials (^DJI)

1 week up

42.4%

Expect a random direction.

4 months up

21.9%

Expect a reversal soon.

S & P 500 (^GSPC)

3 weeks up

22.3%

Expect a reversal soon.

4 months up

28.8%

The trend may continue.

Nasdaq composite (^IXIC)

3 weeks up

26.9%

The trend may continue.

4 months up

18.9%

Expect a reversal soon.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indices, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Found

Chart Pattern Name

22

Triangle, symmetrical

13

Channel

11

Rectangle top

11

Triangle, ascending

7

Triangle, descending

6

Head-and-shoulders top

5

Rising wedge

5

Double Bottom, Adam and Adam

5

Triple top

4

Dead-cat bounce

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example).
However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

Friday 2/10/17. Pattern Trading Setups for the Weekend.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 18 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 621 stocks searched, or 2.9%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

Excluding ETFs, there were 8 bullish chart patterns this week and 2 bearish ones with any remaining (5) being undecided.
The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

Thursday 2/9/17. Intraday Market Direction: Nasdaq

The index climbed by 0.1% or 8.23 points. Since 02/05/1971 the index made 652 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.6% on 363 occasions.

Average loss was -0.8% on 289 occasions.

Expect the index to close higher 55.7% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 120/210 or 57.1% of the time.

The prediction of the index closing lower has been right 41/80 or 51.2% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Nasdaq composite on the 5-minute scale.

The index continues to rise following a channel I show outlined here in red.

The peaks at AB look like an unconfirmed double top. That means it's not a pattern until the index closes below C, the lowest price between the two peaks.

Because this is on the intraday scale, it's hard to tell if it'll confirm or not. Price will gap open either higher or lower, blowing many patterns out of the water.

However, I would say that this pattern would tend to show weakness, not strength. The above probabilities say otherwise.

$ $ $

My eye doc says that there's no sign of any retinal hemorrhage. Yippee. The three I had have mended themselves and disappeared.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Nasdaq composite, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Wednesday 2/8/17. A Look At Indicators

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

The indicator is still bullish even though the line is low. Because the line can fluctuate for up to a week, the bearish move could change.

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...

On Monday, 17% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 17%.

The fewest was 14% on 01/25/2017.

And the most was 69% on 02/11/2016.

Shown as a blue line on the above chart...

The 518 stocks in my database are down an average of 12% from their yearly high.

A week ago, the average was 12%.

The peak was 10% on 12/09/2016.

And the bottom was 32% on 02/11/2016.

The readings this week are unchanged from last week.

The blue line was flat and the red line move up and then sank back down. Looks as if the market is struggling to find a new trend direction.

$ $ $

I went to an ENT today. It took me a while to figure out what that stands for: Ear, Nose and Throat. This is part of my quest to find out the cause of my spitting up a mouthful of blood
back in June and again in October. Lungs were fine. The lung doc blamed the ENT.

The nurse sprayed a decongestant and anesthetic up each nostril. Then the doc came in and took over. We chatted for a bit and then he stuck this foot long tube up my nose and down my throat.
Way cool.

The tube was thinner than a typical straw, probably about half the diameter of a pencil. It had a light and he looked at one end while the probe went down to my larynx. Then he yanked it
out and peered partway into the other nostril.

His guess is that a nodule around my larynx, if it burst, would have been enough to cause the excessive bleeding.

No tumors or cancer or anything else found. So I'm happy.

As I was leaving I asked if losing feeling in my teeth was normal. Yup. It is. Weird feeling, though (actually, the gums are numb).

Tomorrow (Wednesday), I get to visit the eye doc to see if I've had any more eye strokes (retinal hemorrhages). We believe that's a function of high blood glucose spikes, which I've
been working to diminish by cutting carbs.

$ $ $

Went for a short bicycle ride today, the first of the season. It was just over 6.5 miles long, down to a park, circled through a neighborhood and back. Nice 79 degrees today but a
strong wind, 14 mph.

Legs felt weak despite continued work on my elliptical (pedaling backward to save my knees. It helps). Breathing could use some work, too. Yes, I'm a basket case, but I'm not a spring
chicken any more either.

-- Thomas Bulkowski

Tuesday 2/7/17. Intraday Market Direction: Dow

The index dropped by -0.1% or -19.04 points. Since 10/01/1928 the index made 1283 similar moves on a percentage basis. After those moves, the next day's...

Average gain was 0.7% on 664 occasions.

Average loss was -0.7% on 619 occasions.

Expect the index to close higher 51.8% of the time.

Weekly, since inception on 6/14/2011:

The prediction of the index closing higher has been right 131/219 or 59.8% of the time.

The prediction of the index closing lower has been right 32/64 or 50.0% of the time.

Since I post this the night before, check how the futures are trading before market open. Large moves can affect the opening direction.

$ $ $

I show a picture of the Dow industrials on the 5-minute scale.

On Wednesday and Thursday, the Dow formed a rectangle top, highlighted here in red.

This was a continuation pattern, resuming the upward trend that started on Tuesday (I ignore the brief overshoot that appears entering the rectangle, hence, this is a top).

A line of support formed at A and that halted, for a time, the upward move at B. As I write this before the market open, the futures are up, so it looks like we'll see the index
push through resistance, or at least attempt to do so.

$ $ $

The following table shows where Fibonacci retrace values of the day's high-low range are plus pivot points, calculated on the Dow industrials, sorted by value. When several are near each other (small differences),
the area might act as support or resistance.

Consider going short at weekly R1 or long at weekly S1 with a profit objective of the weekly pivot.

Consider going long at weekly S2 or short at weekly R2 with a profit objective of weekly S1 or R1, respectively.

Here are the formulas:

Pivot point: P = (H + L + C)/3

First resistance level: R1 = (2 * P) - L

First support level: S1 = (2 * P) - H)

Second resistance level: R2 = P + (R1 - S1)

Second support level: S2 = P - (R1 - S1)

H = high price , L=low price, C=closing price

Consecutive Price Trends

Index

ConsecutiveCloses So Far

%

Comments

Dow industrials (^DJI)

1 week down

29.0%

The trend may continue.

4 months up

21.9%

Expect a reversal soon.

S & P 500 (^GSPC)

2 weeks up

30.9%

The trend may continue.

4 months up

28.8%

The trend may continue.

Nasdaq composite (^IXIC)

2 weeks up

33.2%

The trend may continue.

4 months up

18.9%

Expect a reversal soon.

How long can an index close higher (or lower) each day? The adjacent table shows how often consecutive up or down closes occur in the indices, based on the most recent trend of closes.

Low percentages suggest the market is overdue to turn (think of it as the likelihood that next week or next month will continue the trend, based on historical performance). Values of 50% mean random, so most percentages will be lower.

The analysis uses data going back 10 years for weekly percentages and 25 years for monthly percentages (or the start of data, whichever is more recent). Any unchanged closing price is interpreted as the end of the string of consecutive up or down closes.

Earnings, Chart Patterns & Industries

Earnings season is either underway or should be starting soon. The sessions could be more volatile.

Found

Chart Pattern Name

23

Triangle, symmetrical

14

Rectangle top

13

Channel

12

Triangle, ascending

7

Triangle, descending

6

Triple top

5

Dead-cat bounce

5

Rectangle bottom

5

Head-and-shoulders top

4

Rising wedge

Large numbers of bullish or bearish chart patterns can signal short- to intermediate-term market trends (many bullish chart patterns can mean an uptrend will continue, for example).
However, please realize that the short-term price trend could have changed since the pattern was discovered (this is especially true of pipe tops or bottoms, which are weekly patterns).

The 10 types of most frequently appearing chart patterns in the stocks, indices, and long-only exchange traded funds I follow during the last month are shown in the adjacent table.

Friday 2/3/17. Pattern Trading Setups for the Weekend.

The following patterns were found manually, so the results may differ from those found using Patternz.

There were 29 patterns found this week (excluding pipe bottoms; pipe tops and bottoms are found looking back 2 weeks) out of 621 stocks searched, or 4.7%. Based on the percentage, the stock market is
trending since few consolidation patterns appear.

I found 1 pipe bottom chart patterns, which is neutral. High numbers of pipe bottoms can signal a bullish move (I see many of them just before a bear market ends or during a bear market rally. Often it means the first bottom of a double bottom has formed. Thus, expect a move down to the second bottom).

Excluding ETFs, there were 14 bullish chart patterns this week and 6 bearish ones with any remaining (7) being undecided.
The ratio of bullish to bearish patterns suggests the market is hinting of a coming bullish (up) turn.

In the table below, the red and green colors are based on the historical breakout direction for the associated chart pattern. If a high and tight flag appears, the start and end dates highlight the flagpole only and not the flag.

Wednesday 2/1/17. A Look At Indicators

This is a picture of the chart pattern indicator on the daily scale. The indicator is the line chart below a chart of the S&P 500 composite.

The indicator flipped to a bearish signal three trading sessions ago. As a reminder, the signal can disappear for up to a week, so keep that in mind.

Notice that the thin blue line suggests this bearish turn does not have staying power. In other words, the line is closing in on a bullish signal by rising. If a bullish signal were to occur, the
red bar would disappear and the green bar in January would remain as the current signal.

I think that scenario is likely.

The red line is the percentage of stocks at least 20% below their 1-year high (plotted upside down). The blue line is the average percentage drop of stocks below their 1-year high (plotted upside down).

Shown as a red line on the above chart...

On Monday, 17% of stocks in my database are in bear market territory (down at least 20% from their 1-year high).

A week ago, it was 17%.

The fewest was 14% on 01/25/2017.

And the most was 69% on 02/11/2016.

Shown as a blue line on the above chart...

The 518 stocks in my database are down an average of 12% from their yearly high.

A week ago, the average was 12%.

The peak was 10% on 12/09/2016.

And the bottom was 32% on 02/11/2016.

The above text shows that the stocks I follow didn't budge over the past week. That's a snapshot of the week ago's numbers compared with today's. Between those two points, the
lines could have waved up and down.

Both the blue and red lines on the chart were higher three days ago and dropped, ending the sample period where it began.

Based only on looking at the chart, it appears that these flat regions end with a dip before another move up. Maybe that will happen again.